Fabindia not to use word ‘Khadi’, may end up paying multi-million dollars in damages! #Quick Recap of the Khadi Dispute

In an interesting update in the on-going dispute between Khadi and Village Industries Commission (KVIC) and Fabindia, earlier this week Fabindia gave an undertaking before the Bombay High Court that it is not presently using the word ‘Khadi’ and in the event it is desirous of using the word ‘Khadi’ in future it shall give four weeks written notice to KVIC. The Court accepted the undertaking and disposed of KVIC’s application seeking injunction order be passed by the Court, prohibiting Fabindia from using the term khadi to sell its products.

This dispute arose about 3 years ago in 2015 when Fabindia was in conversation with KVIC to get authorisation to use the brand name ‘Khadi’ but due to non-compliance with certain procedural norms the authorisation did not materialize. The Khadi Mark Regulations, 2003 and Khadi & Village Industries Commission Act, 1956, stipulate that “no textile shall be sold or otherwise traded by any person, or certified Khadi institution as ‘Khadi products’, in any form or manner, without it bearing a ‘Khadi Mark’ tag or label issued by KVIC”.

Later, Arvind Mills and Raymond got KVIC’s authorisation to use the ‘Khadi’ brand name. Meanwhile, Fabindia continued to sell garments in the name and style of ‘Khadi’, despite of several correspondences and a legal notice sent to it by KVIC to refrain it from using the word ‘Khadi’.

Thereafter, KVIC filed suit against Fabindia a few months ago, for illegally using its trademark “charkha” (spinning wheel) and selling factory-made cotton garments under the guise of ‘Khadi’ (a hand-spun, hand-woven natural fibre cloth) tag and sought damages to the tune of INR 525 crore (approx. USD 74/- million as per today’s exchange rate) from Fabindia for loss of profit due to usage of trademark ‘Khadi’. This matter for ascertaining the damages has been listed for a later date.

Contributor

Contributor to present post are Abhilasha and Shivangi.

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